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Volkswagen operating profit drops by 42% in 2024 Q3

The Federal Government, through the Presidential Compressed Natural Gas Initiative, has reached an agreement with taxi operators at Abuja's Nnamdi Azikiwe Airport.


This collaboration aims to convert 800 petrol-powered vehicles to CNG, which is expected to reduce shuttle fares by 30%.



Mr. Michael Oluwagbemi, Programme Director and CEO of P-CNGI, announced the agreement at a signing ceremony on Tuesday.



He emphasized that this initiative is part of the administration's larger goal of converting one million commercial vehicles to CNG, which promotes a more sustainable and cost-effective transportation solution.



Oluwagbemi, represented by the Programme Execution Coordinator, Mr. Folarin Oworo, explained that airport taxi operators currently manage a fleet of 800 vehicles. He stated that the 30% fare reduction would be implemented once 50% of the fleet, or approximately 400 vehicles, had been converted to CNG.



"The airport taxi operators have a fleet of about 800 vehicles, and we have agreed that once we reach 50% conversion, which is approximately 400 vehicles, a 30% discount will be implemented immediately.



"There are various prices based on the distance one is travelling, so the 30% will be applied accordingly based on the current prices for the areas one is going," said the minister.



He also stated that a rate card detailing prices and discounts will be provided in each vehicle, tailored to the passenger's destination.



Regular monitoring will ensure compliance and effective implementation of the fare reduction initiative.



Oluwagbemi emphasized that the P-CNGI has formed partnerships with accredited conversion centers in Abuja to help taxi operators make the transition to CNG as smoothly and efficiently as possible.



He stated that when the program began a year ago, there was only one operational refilling station in Abuja; this number has since grown to seven, with more stations under development. The Nigerian Midstream and Downstream Petroleum Regulatory Authority is actively processing approvals to increase capacity.



Addressing safety concerns, he stated that explosions are typically caused by illegal installations using substandard cylinders.



The initiative ensures that only SON-certified, bulletproof cylinders are used. Volkswagen, a German automaker, reported a significant 42% drop in operating profit for the third quarter of 2024.

According to CNBC, the company's operating profit decreased to 2.86 billion euros ($3.1 billion) as third-quarter sales revenues fell by 0.5% year on year to approximately 78.5 billion euros.

Volkswagen attributed the decline to an 8.3% decrease in vehicle sales over the same period last year.

Furthermore, the company reported net liquidity for the Volkswagen Group at negative 160.6 billion euros at the end of September 2024, down from negative 147.4 billion euros at the end of 2023.

This financial situation highlights the automaker's ongoing challenges in the current market.

Volkswagen reported on Wednesday that its results for the first three quarters of 2024 were hampered by higher fixed costs and restructuring efforts, resulting in a 21% decrease in operating profit over the previous year.

Despite these challenges, Volkswagen's stock rose 1.8% at 8:19 a.m. London time.

Arno Antlitz, the company's CFO and COO, stated that the performance reflects a "challenging market environment" and emphasized the importance of continuous performance improvement initiatives within the organization.

Volkswagen's third-quarter results come after a second cut to its 2024 annual outlook last month.

The automaker now expects a profit margin of about 5.6% for the year, with sales falling 0.7% to 320 billion euros—figures that remained unchanged on Wednesday.

The company has recently faced challenges, including warnings about potential plant closures in Germany and the termination of several labor agreements with local workers in September.

Furthermore, Volkswagen announced the termination of its employment protection agreement, which had been in place for its German workforce since 1994.

On Monday, the Volkswagen works council announced that the company's management intends to implement significant pay cuts and layoffs, as well as the closure or reduction of all German plants.

In response, Volkswagen emphasized the importance of restructuring and stated that it would present cost-cutting plans during ongoing labor negotiations, which will also take place on Wednesday.

"Ahead of the negotiations today, we need to state: the situation is getting more serious," Volkswagen's chief negotiator Arne Meiswinkel said on Wednesday.

He stated that current developments in the European auto industry, particularly in Germany, are concerning, as evidenced by the most recent figures from Volkswagen and its competitors.They are damage and explosion resistant, as long as they are not tampered with or improperly modified.



To improve efficiency, Oluwagbemi stated that the program offers 65- and 75-liter cylinders to shorten refill times.



Plans are also being developed to introduce different sizes and shapes to accommodate various vehicle and cargo needs.



Airport Taxi Operators spokesman Aliyu Abdulaziz-Aliyu praised the initiative and thanked the federal government for providing the conversion service at no cost.



He expressed confidence that the transition to compressed natural gas would significantly reduce operational costs and result in lower airport passenger fares.

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